Martin Shopping New Must-Carry Plan

2/13/2007 2:11 PM Eastern

By: Ted Hearn

In a new must-carry proposal from Federal Communications Commission chairman Kevin Martin, cable operators would be forced to carry the programming of certain “eligible entities” that had leased excess spectrum from local digital-TV stations, FCC and industry officials confirmed Tuesday.

“The chairman wants to do all that he can to facilitate entry by small business and other eligible entities in an already-crowded field of broadcasting,” an FCC official said Tuesday, one week after Martin and his aides began reaching out for support.

At one meeting not attended by Martin, National Cable & Telecommunications Association president Kyle McSlarrow discussed the proposal with Catherine Bohigian, a Martin confidante who is chief of the Office of Strategic Planning and Policy Analysis. Also in attendance were an official from the National Association of Broadcasters and attorney David Honig, executive director of the Minority Media & Telecommunications Council. Honig also met with Martin separately.

“This is an idea that he’s been openly discussing with a variety of parties, including David Honig, broadcasters, and cable,” an FCC official said.

Honig said he wanted “to give Martin credit” for trying to “split the difference between broadcasting and cable” on carriage of digital-TV signals, which has been raging for nearly a decade.

FCC rules require cable systems to carry just one programming stream of each local digital-TV station that has elected mandatory carriage, or must-carry. Over Martin’s opposition, the FCC has three times rejected rules that would require cable to carry multiple programming streams transmitted by digital-TV stations. Digital-TV stations can't elect must-carry until they have surrendered their analog TV licenses, which is now mandated to occur no later than Feb. 17, 2009.

Under Martin’s new plan, the leasing of spectrum by qualified entities would be voluntary for TV stations, but carriage of the programming would be compulsory for cable operators, an FCC official said.

“We are not commenting right now,” NCTA vice president of communications Brian Dietz said. An NAB official didn’t have an immediate reaction to Martin’s plan.

Martin’s goal is for the FCC to issue a notice of proposed rulemaking to select entities that would be allowed to lease the spectrum and obtain cable-carriage privileges. Martin’s preference is to limit eligibility to new entrants and small businesses to keep the program race neutral, Honig said.

It's doubtful that broadcasters will rush to embrace Martin's idea. Digital-TV stations were hoping that multicast-must-carry mandates would entitle them to cable carriage of five or six channels. But Martin’s plan would seem to shift the cable-carriage benefits to third-party lessees of digital-TV spectrum. TV stations might need to surrender 5% of their lease revenue to the U.S. Treasury under FCC rules today.

“This is not about multicast must-carry for broadcasters,” an FCC official insisted. “This is about providing opportunities for new voices and diverse voices to be heard by any viewers.”

Eligible entities, an FCC official said, would need to comply with public-interest obligations that apply to TV stations, including indecency and children’s television rules.